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Wyeth eyes European salesforce restructure

Speculation mounts as to whether other firms will follow the lead to reduce number of sales reps

Wyeth looks set to streamline its overseas salesforces, after admitting that its European affiliates were already looking at ways to make their marketing arms more effective.

In June the US company announced cuts to its US primary care salesforce, citing the need for cost saving and the ineffectiveness of big pharma firms saturating the market with multiple calls on doctors.

While Wyeth is in the process of cutting the 2,500-strong salesforce by 15 per cent (375 jobs), it actually cut 750, or 30 per cent, of its full-time sales reps, replacing them with 375 part-time employees.

Bernard Poussot, head of pharmaceutical operations at Wyeth, said the company expects to have its US salesforce restructuring in place by January 2006, and that the initial response to the cuts from doctors have been positive.

ìWe're also looking internationally,î he added. ìOur European affiliates have started to assess their salesforces, and analysts could expect similar results to the US restructuring.î

Wyeth chairman and chief executive Robert Essner said the company recognised that `the whole relationship between the rep and doctors has changed.î

ìMore and more doctors tell us they'd rather have a coordinated effort from the company,î he commented. ìThe model we've come up with, I'm hopeful will actually be a more effective model.î

Wyeth's move is a departure from fears within the industry that reducing sales rep visits to doctors could impact negatively on sales and market share. Concern has heightened since the world's largest pharma firm Pfizer said its salesforce restructuring had contributed to a slowdown in growth of its top-selling anti-cholesterol drug Lipitor.

Mark Ravera at Strategic Pharma Consulting Group said after years of building up their salesforces in an `arms race', pharma companies have realised that they are at or beyond the point of diminishing returns.

ìThe extra rep is not going to generate enough incremental revenue to justify the expense and so with all the other pressures, something is going to have to give,î he commented. ìThe salesforce is an area where Wyeth is looking to make modest cuts, which in the giant scheme of things would not have such a big impact on their top line.î

He added that companies still saw salesforce promotion as a key effort in keeping particular drug brands in physician's minds and were therefore wary of cutting back.

ìIf companies step back significantly, competitors may step in to fill the vacuum,î he said. ìEveryone will be slowly edging back a little bit at a time to find the cost-benefit sweet spot.î

30th September 2008

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